On 23 December 2024, a paragraphed version of the draft law amending Act No. 458/2000 Coll., on Business and the Exercise of State Administration in the Energy Sectors (the “Energy Act“) and Act No. 416/2009 Coll., on Accelerating the Construction of Strategically Important Infrastructure (the “Lines Act“) (the “Draft“) was published.

This is Parliamentary Document No.883, which was discussed yesterday by the Government of the Czech Republic, which adopted a favourable opinion on it and recommended a few clarifications. However, it can be expected that the proposal will be discussed in the Chamber of Deputies already this month. The full text of the Proposal can be viewed here.

The proposal aims to ensure energy security, i.e. to ensure the ability of the electric power grid of the Czech Republic to cover all electricity consumption even in the busiest periods.

The proposal is therefore intended to prevent the abrupt shutdown of power plants, as the loss of a power plants production capacity could jeopardise the ability of the Czech electric power grid to adequately cover electricity consumption. For this reason, according to the Proposal, electricity producers operating power plants with a capacity of 100 MW or more are to notify the Energy Regulatory Office (“ERO“) of their intention to cease operation of such power plants in advance, and the ERO will be able to prevent the cessation of operation of a particular power plant by imposing an obligation on the operator to maintain operation beyond the scope of the licence. Alternatively, it will be able to impose an obligation to operate such a power plant on another electricity producer, if the current operator refuses to do so. If the revenues from the production of electricity by the power plant in question do not exceed the costs of carrying out this activity, the operator will be entitled to compensation, including compensation for a reasonable profit, according to the Proposal. Furthermore, the amount of compensation will be determined by the ERO and will be paid through the regulated part of the electricity price for system services. The Proposal therefore assumes that the costs of the above mechanism will be indirectly borne by electricity consumers.

An amendment to the Lines Act, which aims to simplify the permitting process for so-called energy security structures, should also contribute to achieving the above objective. Under the current legal situation, mainly nuclear power plants are designed as energy security structures. The proposal includes gas-fired power generation plants with a total installed capacity of 100 MW or more in this category. The authorisation of such structures is already decided by the Transport and Energy Construction Authority (hereinafter referred to as “DESU“), which can then decide on their authorisation in preference to other projects in accordance with the Proposal.

In practice, the changes will be reflected, for example, in the fact that it will not be possible to appeal against a decision on the authorisation of a project concerning energy security structures. The authorities concerned are furthermore obliged to issue their binding opinions in the project authorisation procedure within 20 days of the submission of a proposal or request. This deadline cannot be extended. If the competent authority concerned fails to issue a binding opinion within this time limit, the legal fiction of a consensual and unconditional binding opinion will apply. In addition, if a zoning plan has been issued for the area in which the construction is to be carried out, it will not be necessary to hold a public hearing in which the parties may object to the project.

The service of process should also be simplified, as the draft law automatically considers the proceedings for the permit for construction for energy security as proceedings with a large number of parties, which means that documents in the proceedings will be served by public notice. However, this does not apply to the applicant, the municipality on whose territory the project is to be carried out and the authorities concerned, who will still be served directly (e.g. via a data box).

Furthermore, for energy security constructions, the validity of the planning permission will be set at 5 years instead of the standard 2 years.

In addition, according to the Proposal, certain changes should be made to the environmental impact assessment (EIA) process. Newly, if the competent authority determines in the conclusion of the assessment procedure that an EIA is not necessary, it will not be possible to appeal against such a decision. An appeal procedure could significantly prolong the whole EIA process and thus delay the implementation of the project itself.

Depending on the progress of the legislative process, we will closely monitor the extent to which the above changes will be reflected in the text of the Energy and Lines Act and will keep you informed about the further fate of the submitted draft, including the progress of the legislative process.

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